Bangalore District Court
Ashirvad Impex vs / S: Green Box Eco Building Sytem on 23 October, 2020
BEFORE THE COURT OF XXIV ADDL. SMALL CAUSES
JUDGE & A.C.M.M. (SCCH-26) AT BENGALURU
DATED THIS THE 23rd OCTOBER 2020
PRESENT: Sri. R.Mahesha, B.A.L, LL.B,
XXIV ADDL. SMALL CAUSES JUDGE
& A.C.M.M.
BENGALURU.
CC.No.5602/2018
Complainant : Ashirvad Impex,
# Sy.No.107/1, 108, 109/1& 2,
Rampur Main road,
K.Channasandra, Horamavu post,
Bangalore-560043.
Represented by Power of attorney
Utsav Patel
(By Smt.Suma N., Adv.,)
V/s
Accused / s: Green Box Eco Building Sytem,
# 48/2/Kudlu gate, Off, Hosur road,
Bangalore-560068.
(By Sri.H.Mujtaba, Adv.,)
JUDGMENT
The private complaint filed by the complainant U/s 200 of Cr.P.C., 1973 against the accused for the offence punishable U/s 138 of Negotiable Instrument Act.
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2. The sum and substance of the complaint, is as follows:
The complainant company is registered and incorporated under the provisions of company`s Act 1956. The company is engaged in the business and distribution of various types of timber and its related products, to distribute its products the complainant company has appointed various distributors/dealers in Gujarat and Karnataka. The accused is the authorized signatory of Green box eco building system is engaged in the business of timbers and its allied products from complainant company. The accused company placed several orders to the complainant company for procurement of timber and its allied products, the complainant company successfully supplied the aforesaid goods as ordered by the accused and accused received the same in good conditions as for their entire satisfaction. The purchase of the timber and its allied products from the complainant company, the accused company received the imported timber worth of Rs.4,21,057/- as per the order detailed invoice No.194, 118, 1464, 1464, 109 dated between 31-03-2018 to 30-04-2018 based on 45 days credit and took delivery of the said material on the invoice dated and have acknowledge the receipt of same. As per the terms and condition required to 3 C.C.NO.5602 of 2018 SCCH-26 make payment of said sum amount to complainant within 45 days from the date of invoice which failed to honour commitments after continuous reminder from complainant and complainant has called the accused several times and demanded for making payment of the said amount but keep on posting the issue via making false commitments and failed to make payment of Rs.4,21,507/-. The complainant finally approached for a payment, accused issued cheque for Rs.2,99,507/- cheque bearing No.432986 of INDUSIND BANK JAKKASANDRA branch, Bangalore-
560102 dated 07-09-2018. The complainant presented the said cheque for collection through their banker AXIS bank, Hennur main road branch, Bangalore, but the said cheque was dishonoured with banker`s endorsement " Funds Insufficient ''. The complainant got issued a notice on 03-10-2018 to the accused through speed post calling upon the accused to pay the said sum amount of Rs.2,99,507/- with bank charges and over due interest within 15 days from the date of receipt of the said notice. The notice sent through speed post has served on the accused on 04-10-2018 and acknowledgment has been received by the complainant counsel on 12-10-2018, but the accused has not paid the cheque amount. Hence the 4 C.C.NO.5602 of 2018 SCCH-26 complainant has filed this complaint taking action against the accused in accordance with law.
3. After filing of the complaint U/S 200 Cr.P.C. this court takes cognizance of the offence U/s 138 of NI Act and the sworn statement of the complainant is recorded and the complaint was registered as criminal case and process was issued to the accused. The accused appeared before the court and enlarged on bail and supplied the complaint copy. Thereafter, accusation for the offence U/s 138 of NI Act was read over to the accused. The accused pleaded not guilty and claim to be tried. The case is posted for evidence.
4. The complainant in order to prove its contentions had examined its authorized signatory who is representative of complainant company as P.W.1. Ex.P1 to P11 got marked. Closed the complainant side evidence. Ex.P1. Cheque- it belongs to Account No.201000436561, the accused signature marked as Ex.P1a, Ex.P2-Endorsement- it clear that the complainant presented the cheque for encashment through his banker, after that bank issued an endorsement as "Funds Insufficient" in the account. Ex.P3 - speed post receipt and acknowledgment card, it clear that the complainant had issued legal notice to the 5 C.C.NO.5602 of 2018 SCCH-26 accused company through RPAD. Ex-P4-legal notice, it clear that the complainant issued legal notice on 03/10/2018 to the accused company to calling upon him to repay the loan amount. Ex-P5-Ledger account, Ex-P6 to 10- are the tax invoices and Ex-P11-Letter of authorization.
5. After filing of this complaint, case was registered as P.C.R. and sworn statement of the complainant was recorded. Thereafter cognizance was taken and registered in Crl.Reg.No.III and summons issued to the accused. In response of summons, accused appeared through their counsel and got enlarged them on bail. The plea was recorded, read over and explained to the accused they pleaded not guilty and claims to be tried. Hence the case is posted for complainant evidence.
6. Heard arguments of both side. Perused the record and documents.
7. On the basis of above averments the following points arises for my consideration:
1. Whether the complainant proves that the accused has issued Ex.P1/ cheque towards legally recoverable debt?6 C.C.NO.5602 of 2018
SCCH-26
2. Whether the complainant proves that the cheque was dishonored on its presentation through his banker?
3. Whether the complainant proves that the accused without having sufficient funds in his account issued Ex.P1/cheque?
4. Whether the complainant proves that the accused failed to make good to the complainant on its dishonor within stipulated period and thereby committed an offence punishable Under Section 138 of NI Act?
5. What order?
8. My answer to the above points are as under. Point No.1: In the Affirmative.
Point No.2: In the Affirmative Point No.3: In the Affirmative Point No.4: In the Affirmative Point No.5: As per the final order for the following.
REASONS
9. Point No.1 to 4: As these four points are interlinked each other, to avoid repetition of facts and circumstances, the above points taken together for common discussion.
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10. The provision of Section 101 of the Indian Evidence Act provide that the burden of proof rests on the party who substantially asserts it and not on the party who denies it, in fact burden of proof means that a party has to prove an allegation before he is entitle to a judgment in his favour. Further law U/s 103 of Indian Evidence Act amplifies the general rule of Section 101 that the burden of proof lies on the person who asserts the affirmative of the fact in issue.
11. The burden lies on the complainant to prove the complainant company complied with mandatory requirements of Section 138 of NI Act.
The three ingredients of offence U/s 138 NI Act are as under.
1. That there is a legally enforceable debt
2. That cheque was drawn from the account of bank for discharge in whole or in part of any debt or any other liability which presuppose legally enforceable debt
3. That the cheque so issued had been returned due to insufficiency of funds.
The proviso appended to the said section provides for compliance with legal requirements before the complaint/petition can be acted upon by court of law.
Section 118A of NI Act deals with special rule of evidence and stated that, every negotiable instrument act 8 C.C.NO.5602 of 2018 SCCH-26 is deems to have been drawn for consideration. Section 139 of NI Act enables the court to presume, unless contrary is proved, that the holder of the cheque received the cheque of the nature referred in Section 138, in whole or in part, of any debt or other liability.
The presumption available U/s 118 and 139 of NI Act is rebuttal in nature, the accused can rebut the same by either entering into the witness box or effectively cross examine the complainant and his witness.
12. It is the case of the complainant that he knows the accused. The accused has received the imported timber worth of Rs.4,21,057/-. As [per the order detailed invoice dated between 31-03-2018 to 30-04-2018, based on 45 days credit and accused took delivery of the said materials on the invoice dated same was acknowledged by accused. The accused company as per terms and conditions required to make payment of said sum amount to complainant within 45 days from the date of invoice. In which accused company failed to honour their commitments. Even complainant company continuously reminded and called to accused several times, he did not make the payment of above said amount. When complainant company finally approached for a payment, accused issued cheque for Rs.2,99,507/- on 07-09-2018. The accused assure to present the cheque for encashment 9 C.C.NO.5602 of 2018 SCCH-26 on 20-09-2018, when cheque presented for encashment through his banker which came to be dishonoured and Funds Insufficient.
13. For payment of the said amount he has issued the cheque, on presentation of the said cheque, the cheque was returned as funds insufficient. Inspite of repeated demands, the accused has not repaid due amount. In order to prove the case the complainant examined as P.W.1. The complainant filed his examination in chief affidavit by reiterating the entire complaint averments. In order to substantiate the complainant's evidence he has produced Ex.P1 to P11.
14. On perusal of Ex.P1 to P11 it clear that the accused issued cheque as per Ex.P1, on presentation of cheque, the same was returned with endorsement as per Ex.P2 as Funds Insufficient. Thereafter complainant issued legal notice as per Ex.P4, same was duly served on Techno Sales Corporation Pvt., Ltd., Bengaluru as Ex.P3. In spite of repeated demand by the complainant, the accused did not repay the loan amount.
15. On behalf of the accused, PW-1 having been cross examined and only defence that had been put forward in the cross examination that the present PW-1 10 C.C.NO.5602 of 2018 SCCH-26 has no authority to prosecute the case. On careful perusal of entire cross examination, the accused himself suggested that, cheque of accused company had been obtained by assuring supply goods then complainant company did not supplying any goods. The alleged cheque was handed over to complainant company for the assurance made by complainant company for supplying the goods. So from this suggestion of the accused, it is clear that the alleged Ex-P1 belongs to accused company and signatory is accused. PW-1 on his oath deposed in sworn statement of para 3 and para 5 of the complaint that the accused is authorized signatory of green box Eco building system is engaged in the business of timbers and its allied products from the complainant company. The accused himself suggested in cross examination that accused institution is legal institution and it has been represented by some person. The complainant clearly stated in his complaint and on oath in sworn statement, the accused company is legally registered company and represented by authorized signatory. To prove above facts, the complainant company produced Ex-P11. On careful perusal of Ex-P11 the complainant company on 28-09-2018 authorised one Mr.Utsav Patel on behalf of company to attend and represent in the court of law. In Ex-P11 the company partners have authorized to do all the acts, deeds and things and authorize to sign all documents to file the case 11 C.C.NO.5602 of 2018 SCCH-26 in courts and to do all formalities for filing the cases in various court of law which are necessary for day today running business of the company. So as per Ex-P11 Mr.Utsav Patel is having proper authority to represent the complainant company.
16. Further the learned accused counsel mainly attacked PW-1, the legal notice sent by complainant company has not been served to authorized signatory and accused company. During the cross examination PW-1 also through confrontation accept Ex-P3 served on Techno Sales Corporation Pvt., Ltd., Bengaluru but accused defence is accused did not having his company address stated in the complaint cause title. Even if it is accepted for the sake of argument that the said legal notice was not received by accused, the same will not come to the rescue of the accused so far as an offence U/s 138 of NI Act is concerned. If the other ingredients are duly proved and fulfilled.
17. As per the Apex court decision, in the case of - C.C.Alavi Haji Vs Palapetty Muhammed reported in 2007 part 6 SCC 555 wherein it has been categorically held that-
a person who does not pay the amount of cheque within 15 days of receipt of the summons from the court along with the copy 12 C.C.NO.5602 of 2018 SCCH-26 of the complaint U/S 138 of NI Act. In NI Act cases offence U/s 138 the reason for explained to be issuing notice is to give an opportunity to the drawer to pay the cheque amount within 15 days of service of notice and thereby free himself from the penal consequence of Section
138. The accused cannot simply by contending non receipt of legal notice, escape the clutches of law despite not paying the amount of the cheque. If otherwise offence U/s 138 of NI Act is proved against him. The cheque amount in question remained unpaid even after expiry of 15 days from the date of service of notice and same is unpaid till date.
18. In the present case on hand, the accused himself appeared before this court through his advocate on 04-02- 2019 by putting his company seal on the vakalath i.e., for Green Box Eco Building System-Proprietor. He himself declared on the vakalath he is the proprietor of Green Box Eco Building System. He executed surety bond in the name of Green Box Eco Building System. As discussed above, it is not the case of accused that the address to which the notice was sent is not his address.
19. It is worthfull to refer Hon`ble Apex court decisions in the case-
Parameshwari Unni Vs G.Kannan and others and K.Bhaskaran Vs Sankaran Vidya Balan and others 1999(7) SCC 510.
13 C.C.NO.5602 of 2018SCCH-26 The Hon`ble Supreme Court while dealing with a case relying to service of notice U/s 138 of NI Act. The Hon`ble Apex court observed as under. Section 27 of General Clause Act where the sender had dispatched the notice by post with correct address written on it, then it can be deemed to have been served on the addressee. The General Clause Act will apply to a notice sent by post and it would be for the drawer to prove that it was not really served and that he was not responsible for non service. So from above Apex Court clearly held if anybody wants to prove non service of statutory notice, the burden lies on him to prove RPAD notice sent by holder of in due course is not served on him.
20. In the present case on hand, accused did not apt to lead any evidence and not produced any document to show the address shown in the cause title was not belongs to his company and he was not signatory of the Ex-P1. Therefore the court can hold the point legal notice sent by complainant company served on accused company he did not gave any reply neither payment till date. Hence accused contention regarding legal notice has been not served on him holds no water.
21. During the course of argument, learned accused counsel submitted that, the alleged signed cheque was handed over to complainant company for the security purpose. The complainant company did not produced any 14 C.C.NO.5602 of 2018 SCCH-26 purchase order given by accused. On the other hand, PW- 1 has produced Ex-P5 to 10-tax invoice receipts in its voucher No.C118, C194 and invoice No.109 and invoice No.1430 and invoice No.1464 addressed to accused company. The description of goods stated in above invoice numbers delivered through different vehicles in different dates. The accused to counter did not file any contrary evidence to show he did not gave any order and he did not receive any goods from complainant company. Therefore this court can come to conclusion that, accused gave vague defence without any proof. Further during the argument, learned accused counsel submitted that in case, if this court come to conclusion that convict the accused there is no possibility to arrest the company. As already discussed above, the complainant company in his complaint and in his sworn statement clearly stated that accused company authorized signatory placed several orders for procurement complainant company successfully supplied the timber and its allied products in good condition as far satisfaction of accused company. The accused appeared as he is the proprietor of accused company. The accused company is legally registered company. So its proprietor is liable for act done on behalf of company. The accused counsel himself suggested to PW-1, accused company is legally registered company. so it can also take admission of accused. So there is no legal 15 C.C.NO.5602 of 2018 SCCH-26 hurdle to convict the accused if materials available on record and basic ingredients of alleged offence are fulfilled. The accused though contends in his defence he gave cheque as a security for assuring by complainant company for supplying goods. To prove the same, he has neither produced nor got any witness examined to substantiate the said contentions. In his cross examination, no where accused suggested to PW-1, when he gave cheque in security? For what amount?. From this omission, this fact clear that accused admits Ex-P1 issuing for paying amount mentioned in face value of the cheque. Though accused states his cheque has been misused or mis- utilised, he has not taken any legal action against the complainant on the ground what contended in the case.
22. Further the learned accused counsel took this court attention about admission given by PW-1 in his cross examination that on Ex-P1 cheque date mentioned as 20-09-2018 and accused counsel suggested to PW-1 accused did not issued any cheque on 07-09-2018. Further it was denied by PW-1 that the complaint contents are false. The learned accused counsel mainly argued that PW-1 gave in consistence answer in cross examination. He clearly admits all the contents averred in the complaint are false. Therefore complaint averments are not inconsonance with the oral admission of PW-1. In the above background 16 C.C.NO.5602 of 2018 SCCH-26 court carefully scrutinized the complaint averments and documents in Ex-P4 and para 8 of complaint, it can be seen that in para 4 of Ex-P4 and para 8 of the complaint. When complainant company finally approached for the payment the accused company issued cheque instead of giving cash for Rs.2,99,507/- cheque bearing No.432986 of Indu Sind Bank, Jakkasandra branch. The accused promised to complainant company honour the cheque on 20-09-2018. So from above contents of Ex-P4 and para 8 of the complaint, it is clear that the complainant company clearly laying foundation about he received alleged cheque, he gave post dated cheque by assuring present before bank for collection on 20-09-2018. Therefore PW-1 stated in his cross examination that on 07-09-2018 the alleged Ex-P1 received, but in Ex-P1 cheque date mentioned as 20-09-2018. The oral evidence given by PW-1 in consonance with the contents of Ex-P4 para 4 and para 8 of the complaint. Therefore the argument canvassed by above point stated supra by accused counsel holds no water.
23. At this stage it is pertinent to that Apex court decision reported in -
Hithin P Dalal Vs. Brathin Dranath Benerji - Lakshmi Dyechem Vs. State of Gujarath and others- umar Exports 17 C.C.NO.5602 of 2018 SCCH-26 Vs.Sharm Cerpets and K.N.Beena Vs. Muniyappa and others.
The Hon'ble Apex court clearly held that "onus of proving that the cheque issue was not in discharge of any debt or any liability is on the accused drawer of the cheque, it is obligatory on courts to raise the presumption provided U/s 139 of the NI Act. The said presumption is rebuttal and can be rebutted by accused by proving the contrary by needing cogent evidence that there was no debt or liability. The Supreme Court observed that it is immaterial that the cheque is filled by any person other than drawer provided it is duly signed by the drawer. The same would not invalidate the cheque and shall attract the presumption U/s 139 of NI Act.
A meaning full reading of the provisions of Negotiable Instrument Act including in particular section 20, 87 and 139 makes it amply clear that a person who signs a cheque and makes it over to the payee remains liable unless, he adduced evidence to rebut the presumption that the cheque had been issued for payment of debt or in discharge of a liability, it is immaterial that the cheque may have been filled in by any person other than the drawer, if the cheque is duly signed by the drawer, if the cheque is otherwise valid, the penal provision of Section 138 would be attracted.
If a signed cheque voluntarily presented to a payee towards sum payment, the payee may fill up the amount and other particulars, this in itself would not invalid the cheque. The onus would still be on the accused, to prove 18 C.C.NO.5602 of 2018 SCCH-26 that the cheque was not indischarge of a debt or liability by adducing evidence.
24. It is profitable to refer Hon'ble Apex Court decision -
IN THE SUPREME COURT OF INDIA IN CRIMINAL APPEAL NO. 508 OF 2019 (Arising out of Special Leave Petition (Crl.) 1883 of 2018) ROHITBHAI JIVANLAL PATEL VS. STATE OF GUJARAT & ANR In this case Hon'ble Supreme court held that the onus on the complainant to prove his case beyond reasonable doubt by trial court these consideration and observation do not standing conformity with the presumption existing infavour of the complainant by virtue of Section 118 and 139 of NI Act and presumption is that existence of legal enforceable debt is to be presumed in favour of the complainant. When such presumption is drawn the factor relating to the want of documentary evidence in the form of receipts or accounts or want of evidence as regards source of funds were not of relevant consideration while examining the if the accused has been able to rebut the presumption or not. The other observation as regards any variance in the statement of complainant and witnesses or want of knowledge about dates and other particulars of cheques.
19 C.C.NO.5602 of 2018SCCH-26
25. Further Hon'ble Apex court clearly held that the order of acquittal on the mere ground of creation of doubt it can misplaced the assumption by the trial court. Mere relation of doubt is not sufficient to rebutted the presumption as envisaged by Section 139 of NI Act.
26. Further this court relied Hon'ble Supreme Court of India recent decision in-
Crl.Appeal No.1545/2019 Uttam Ram Vs. Devender Singh Hudan and others, decided on 17/10/2019 by division bench. The Apex court held that -
once signed cheque issued court can presumed that cheque in question drawn for consideration to holder of the cheque. The complainant proves before court regarding existence of debt. Thereafter the onus shifted on accused to prove there is no existence of legally recoverable debt, then court can hold presumption in favour of complainant is proper. Under Negotiable Instrument Act, there is clear presumption about existence of legally enforceable debt.
27. In present case on hand issuing of cheque is proved. In this case Ex.P1 belongs to accused and signature on Ex.P1 is not disputed. The case of complainant that the accused issued cheque towards part payment of timber and allied materials supplied by complainant company seems probable in the absence of 20 C.C.NO.5602 of 2018 SCCH-26 any cogent material placed on record by the accused. In order to show the said cheque was issued towards security. Therefore the court is of considered opinion that the complainant has discharged his initial onus laid on him when he has discharged his initial onus, presumption is raised U/S 118 A and 139 of N.I.Act and accused is obliged to rebut the statutory presumption available to the complainant. The accused has failed to raise probable defence which creates doubts about the existence of a legally enforceable debt or liability. The defence raised by the accused remains as defence only and does not take the place of proof. Though accused has try to rebut the statutory presumption, he has failed in his attempt for the reasons discussed supra. The accused has not rebutted the statutory presumption available to the complainant. The complainant company had substantially proved its contention that Ex-P1 to 11 cheque is issued by the accused towards discharge of debt and on presentation of the said cheque came to be dishonoured for the reason insufficient of funds, thereafter having intimated about dishonour of the cheque the accused having failed to make payment of the dishonour of the cheque amount, it had proved that accused has guilty of the offence punishable U/s 138 of NI Act. By allowing the cheque to be dishonoured without maintaining sufficient funds inspite of issuing cheques towards discharge of legally enforceable 21 C.C.NO.5602 of 2018 SCCH-26 debt. Hence in the circumstance, the complainant having proved its case. Hence I answer Point No.1 to 4 in the Affirmative.
28. Point No.5: Since this court has already held that the cheque in question was issued towards discharge of legally enforceable debt and the accused has committed an offence U/s 138 of NI Act. This court has power to impose both sentence of imprisonment and fine on the accused. The court is of the opinion that it is appropriate to impose the sentence of fine only on the accused, instead of sentencing him to undergo imprisonment. Further accused has to compensate the complainant in terms of money. In the result, I proceed to pass the following:-
ORDER By Acting U/s 255(2) of Cr.P.C the accused is hereby convicted for the offence punishable U/s 138 of NI Act.
The accused is hereby sentenced to pay fine of Rs.3,55,000/- (Rupees Three Lakhs Fifty Five thousand only) and acting U/s 357(3) of Cr.P.C. out of the total fine amount payable by the accused a sum of Rs.3,50,000/-
shall be payable to the complainant as compensation and remaining amount shall be defrayed as state expense.
In default of payment of fine the accused shall under go simple imprisonment for a period of 6 months.
22 C.C.NO.5602 of 2018SCCH-26 It is further made it clear that if the accused opt to undergo imprisonment, it does not absolve him from liability of paying compensation to the complainant.
Office is hereby directed to supply free certified copy of this judgment to the accused forthwith. (Dictated to the stenographer, typed by her directly on the computer, the same is corrected and then pronounced by me in the open court on this the 23rd October 2020) (R. Mahesha) XXIV Addl. Small Causes Judge, & A.C.M.M. Bengaluru.
ANNEXURE
1. List of witnesses examined for the complainant:
PW-1 : Utsav Patel
2. List of documents marked for the complainant:
Ex.P1 : Cheque Ex.P1(a) : Signature Ex.P2 : Endorsement Ex.P3 : Speed post receipt Ex.P4 : Legal notice Ex.P5 : Statement Ex.P6 to 10 : Tax invoices Ex.P11 : Letter of authorization
3. List of witnesses examined for the accused:
-NIL-23 C.C.NO.5602 of 2018
SCCH-26
4. List of documents marked for the accused:
-NIL-
(R. Mahesha) XXIV Addl. Small Causes Judge, & A.C.M.M. Bengaluru.